Chapter

Member Countries’ Obligations and Status under Articles VIII and XIV

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2015
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This section provides an overview of the status of IMF members’ acceptance of the obligations of Article VIII, Sections 2(a), 3, and 4, of the IMF’s Articles of Agreement and of the use of the transitional arrangements of Article XIV. It also describes recent developments in restrictive exchange measures—namely, exchange restrictions and multiple currency practices (MCPs) subject to IMF jurisdiction under Articles VIII and XIV and measures imposed by members solely for national and/or international security reasons. This section refers to changes in restrictive exchange measures in 2014 and to members’ positions as reported in the latest IMF staff reports as of December 31, 2014.

Of 188 members of the IMF, 168 have accepted Article VIII status (Figure 1). In accepting the obligations of Article VIII, Section 2(a), 3, and 4, members agree not to impose restrictions on the making of payments and transfers for current international transactions or engage in discriminatory currency arrangements or MCPs, except with IMF approval.

Figure 1.IMF Members That Have Accepted the Obligations of Article VIII, Sections 2(a), 3, and 4, 1945–20141

Source: AREAER database.

1 As of December 31, 2014.

No member country has accepted Article VIII obligations since 2011. Following the period of increased acceptance in the first half of the 2000s, the share of Article VIII members has remained flat at about 90 percent of total members in recent years. Of these Article VIII members, the number of those maintaining restrictive exchange measures stayed the same at 31 in 2014.14

The latest IMF staff reports indicate that many members with Article XIV status maintain restrictions subject to IMF jurisdiction under Article VIII.15 Among the 20 members with Article XIV status, 3 countries maintain no restrictions but have not yet decided to accept the obligations under Article VIII. Five countries maintain both original or adapted Article XIV exchange measures and Article VIII restrictions. The exchange arrangement for Tuvalu is under IMF staff review, and that of Somalia will be reviewed in due course. The remaining countries maintain exchange measures under Article VIII only.

Restrictive Exchange Measures

Exchange restrictions and multiple currency practices

The overall number of restrictive exchange measures increased considerably, while the composition of the members maintaining them changed only marginally (Table 9). The trend reflects in part the elimination of only a few previously identified restrictive exchange measures. In 2014, only two countries reported the removal of an exchange restriction (Sudan) or an MCP (Myanmar). On the other hand, largely reflecting improved reporting by member countries, 19 restrictive measures were newly introduced or identified in 2014. Six of the new measures (5 exchange restrictions and 1 MCP) were maintained by Article VIII countries, whereas 13 new measures (10 exchange restrictions and 3 MCPs) were maintained by Article XIV members. Although many of the restrictive measures were in place for some years and only recently identified as restrictions or MCPs, some restrictions were introduced in recent years in response to balance of payments difficulties—for example, in Bhutan, Ghana, and Ukraine. A relatively large number of newly identified restrictive measures in Article XIV members reflects the completion of the first IMF staff review for several countries. For example, the review of exchange arrangement for South Sudan as a new IMF member found 4 exchange restrictions and 3 MCPs, the majority of which are under the transitional arrangements of Article XIV.

Table 9.Exchange Restrictions and Multiple Currency Practices, January 1–December 31, 2014
Member under
Article XIV StatusArticle VIII StatusTotal
201220132014201220132014201220132014
Total number of restrictions and MCPs maintained by members1545466495762103111128
Restrictions on payments for imports6473579914
Advance import deposit and margin requirements2111311
Restrictions on advance payments1222223
Requirement to balance imports with export earnings111111
Restrictive rules on the issuance of import permits111111
Tax clearance requirements112112
Other11224136
Restrictions on payments for invisibles151921687212728
Education111111
Medical services111111
Travel services3331433
Income on investment8910576131616
Tax clearance requirement234132366
Exchange tax on profits11
Interest on deposits and bonds111222333
Profits and dividends333122455
Foreign exchange balancing for profit remittances111111
Clearance of debts to government to remit profits111111
Other25611267
Restrictions on amortization on external loans112333445
Restrictions on unrequited transfers344122466
Wages and salaries11111122
Clearance of debt to government to remit wages111111
Family remittances1111
Other222222
Nonresident accounts222222444
Transferability of frozen or blocked deposits111222333
Limits on usage of foreign currency accounts111111
Restrictions arising from bilateral or regional payment, barter, or clearing arrangements: unsettled debit balances333444777
Restrictions with general applicability1071191013191724
Administered allocations, rationing and undue delay5353468711
Payments above a threshold111111
Tax clearance certificates111111
Exchange taxes111334445
Surrender of export earnings to have access to foreign exchange000111111
Other324111435
Multiple currency practices141416212324353740
Exchange taxes4441544
Exchange subsidies111111
Multiple price auctions233222455
Differentials between official, commercial, and parallel rates767141718212325
Margin requirements111111
Non-interest-bearing blocked accounts111111
Non-interest-bearing advance import deposits111111
Exchange rate guarantees1111112
Memorandum items:
Average number of restrictions per member3.93.94.41.51.82.02.22.52.8
Number of countries with restrictions141415323131464546
Sources: AREAER database; and IMF staff reports.

Includes 188 members and 3 territories: Aruba and Curaçao and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Sources: AREAER database; and IMF staff reports.

Includes 188 members and 3 territories: Aruba and Curaçao and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Article XIV members continued to maintain a significantly higher number of restrictions or MCPs than Article VIII countries. With a stable country composition and an increase in the number of restrictive exchange measures, the average number of measures increased from 3.9 to 4.4 for Article XIV countries, and from 1.8 to 2.0 for Article VIII countries. The overall average number of measures rose to 2.8 a member country in 2014.

More than a half of newly identified exchange restrictions apply to payments and transfers for certain current international transactions covering both imports and current invisible transactions. Four exchange restrictions arise from administered allocations, rationing, and undue delay. These include priority allocation of foreign exchange at a more appreciated rate to certain transactions in the Islamic Republic of Iran, rationing in South Sudan, the extra burden caused by channeling of foreign exchange transactions to the parallel market in South Sudan, and the imposition of absolute limits on the availability of foreign exchange for certain current international transactions in Ukraine. Bhutan restricted the availability of Indian rupees for certain current international transactions to manage recurring pressure on Indian rupee reserves.

Most other newly identified exchange restrictions are imposed on payments for imports, usually in the form of requirements to submit certificates of tax clearance. For example, South Sudan requires proof that an importer is current on its tax payments before providing foreign exchange for priority imports. Albania and Ghana restrict access to foreign exchange for import payments if the importer cannot submit proof in the form of customs clearance documents that the previous import payments had indeed been delivered. Ghana also prohibits foreign-currency-denominated loans to non-foreign-exchange earners, limiting trade credits for importers.

Some IMF members maintained exchange restrictions specific to current invisible transactions. These include a limit on payments for current invisible transactions by requiring a tax certificate showing no outstanding taxes (Albania), ceilings on the amount of foreign exchange residents may purchase for certain invisible transactions (South Sudan), and requirements to pay the interest on and amortization of external loans from companies’ own foreign exchange resources (Bhutan).

All three newly identified MCPs arise from actual differences between exchange rates used in different exchange markets, including for certain official transactions. In the Islamic Republic of Iran, the official exchange rate for all exchange transactions differs in practice by more than 2 percent from the market rate. In South Sudan, two MCPs arise from the spread of more than 2 percent between the official and market exchange rates and the spread of more than 2 percent between the parallel market rate, on one hand, and the official exchange rate and commercial market rate on the other hand. Myanmar eliminated an MCP arising from the use of foreign exchange certificates in March 2014, when all such certificates were redeemed and subsequently abolished.

Table 10 provides descriptions of restrictive exchange measures as indicated in the latest IMF staff reports as of December 31, 2014. Excluded from Table 10 are member countries that have not consented to publication of such measures described in unpublished IMF staff reports.

Table 10.Exchange Restrictions and/or Multiple Currency Practices by Country, as of December 31, 2014
Country1Exchange Restrictions and/or Multiple Currency Practices2
AlbaniaThe IMF staff report for the 2013 Article IV consultations with Albania states that, as of February 14, 2014, Albania maintained an exchange restriction in the form of outstanding debit balances on inoperative bilateral payment agreements, which were in place before Albania became an IMF member. These relate primarily to debt in nonconvertible and formerly nonconvertible currencies. Albania maintains two further exchange restrictions inconsistent with Article VIII, Sections 2(a) and 3 under the IMF’s Articles: (1) an exchange restriction arising from the requirement for residents and nonresidents to submit a tax certificate that they do not owe any outstanding taxes prior to transferring foreign exchange for certain current transactions including the payment of moderate amounts for amortization of loans, the payment of certain insurance premium, and the transfer of profits and dividends from investments in Albania; and (2) an exchange restriction arising from the requirement to provide customs clearance documents in respect of advance import payments prior to making payments for unrelated foreign exchange transactions. (Country Report No. 14/78)
AngolaThe IMF staff report for the 2014 Article IV Consultation states that, as of August 14, 2014, Angola continues to avail itself of the transitional arrangements under the provisions of Article XIV, Section 2, and maintains two exchange measures, namely (1) limits on the availability of foreign exchange for invisible transactions, such as travel, medical, or educational allowances; and (2) limits on unrequited transfers to foreign-based individuals and institutions. In addition, Angola maintains two exchange restrictions resulting from (1) limits on the remittances of dividends and profits from foreign investments that do not exceed US$1,000,000, and (2) the discriminatory application of the 0.015% stamp tax on foreign exchange operations that are subject to approval under Article VIII, Section 2(a). Angola maintains two MCPs (1) arising from the Dutch foreign exchange auction, and (2) the discriminatory application of the 0.015% stamp tax on foreign exchange operations that are subject to approval under Article VIII, Section 3. (Country Report No. 14/274)
ArubaThe IMF staff report for the 2013 Article IV consultation discussions with the Kingdom of the Netherlands—Aruba states that, as of July 12, 2013, Aruba maintained a foreign exchange restriction arising from the foreign exchange tax on payments by residents to nonresidents (1.3% of the transaction value). (Country Report No. 13/258)
BangladeshThe IMF staff report for the 2013 Article IV consultation with Bangladesh states that, as of November 11, 2013, Bangladesh maintained an exchange restriction on the convertibility and transferability of proceeds of current international transactions in nonresident taka accounts. (Country Report No. 13/357)
BelarusThe IMF staff report for the 2014 Article IV consultation with Belarus states that, as of June 10, 2014, Belarus maintained exchange restrictions and MCPs subject to the IMF’s jurisdiction. The exchange restrictions arise from the requirement of a National Bank of the Republic of Belarus (NBRB) permit for (1) advance payments for imports and (2) payments for imports with delivery outside of Belarus. The MCPs arise from (1) the potential deviation by more than 2% of the exchange rates in the OTC market and the Belarusian Currency and Stock Exchange (BCSE), (2) the potential deviation by more than 2% of the exchange rates in the OTC market and the BCSE exchange rate or the official exchange rate with respect to the mandatory resale of unused foreign exchange by resident legal entities and foreign exchange amounts subject to mandatory sale requirement, and (3) broken cross-rates among the currencies for which the NBRB establishes official exchange rates with monthly frequency with respect to the mandatory resale of unused foreign exchange by resident legal entities and foreign exchange amounts subject to mandatory sale requirement. (Country Report No. 14/226)
BhutanThe IMF staff report for the 2014 Article IV consultation with Bhutan states that, as of June 2, 2014, Bhutan continues to avail itself of transitional arrangements under Article XIV, Section 2, pursuant to which it maintains exchange restrictions in connection with (1) the availability of foreign exchange for travel, except for medical travel abroad by Bhutanese citizens, invisibles, and private transfers; (2) foreign exchange balancing requirement on remittances of income in convertible currencies or other foreign currencies from FDI; and (3) the availability of foreign exchange for importers who are not able to provide the identity of the seller. Bhutan also maintains exchange restrictions subject to IMF approval under Article VIII, Section 2(a) in connection with (1) the foreign exchange balancing requirements for imports of capital goods (for projects involving FDI) and primary raw materials (for certain industrial projects); (2) banning residents who do not comply with the requirement to repatriate export proceeds from accessing foreign exchange for unrelated imports; (3) requiring FDI businesses to pay for their establishment and operational expenses from their own convertible currency resources; (4) requiring Bhutanese companies to pay the interest on and amortization of external loans from their own convertible currency resources; (5) restricting the availability of Indian rupees for making payments and transfers to India in the following current international transactions: personal and business travel and study-abroad living arrangements, family and salary remittances, advance payments for imports from India and to recruit Indian workers, and imports of certain construction materials and vehicles from India; and (6) banning the access to Indian rupees for unrelated current international transactions for those who contravene Royal Monetary Authority’s (RMA’s) 2012 guidelines on Indian rupee transactions. Staff is in the process of assessing other measures imposed by the authorities with respect to their consistency with Bhutan’s obligations under Article VIII, Sections 2(a) and 3. (Country Report No. 14/178)
Bosnia and HerzegovinaThe IMF staff report for the 2012 Article IV consultation with Bosnia and Herzegovina states that, as of September 12, 2012, Bosnia and Herzegovina maintained restrictions on the transferability of balances and interest accrued on frozen foreign currency deposits, subject to IMF jurisdiction under Article VIII. (Country Report No. 12/282)
BurundiThe IMF staff report for the 2014 Article IV Consultation, Fifth Review under the Three-Year Arrangement under the Extended Credit Facility states that, as of July 29, 2014, Burundi maintained one MCP that is inconsistent with Article VIII, Section 2(a): the exchange rate used for government transactions differs at times by more than 2% from market exchange rates. (Country Report No. 14/293)
ColombiaThe IMF staff report for the 2014 Article IV consultation with Colombia states that, as of May 2, 2014, Colombia maintained an exchange restriction subject to IMF approval under Article VIII arising from the special regime for the hydrocarbon sector. (Country Report No. 14/141)
Democratic Republic of the CongoThe IMF staff report for the 2014 Article IV consultation with the Democratic Republic of the Congo (DRC) states that, as of May 20, 2014, the DRC maintained measures that give rise to one exchange rate restriction and one MCP subject to IMF approval. The exchange restriction involves an outstanding net debt position against other contracting members under the inoperative regional payments agreement with the Economic Community of the Great Lakes Countries. The MCP relates to a fixed exchange rate set quarterly applying to transactions through a bilateral payments agreement with Zimbabwe. (Country Report No. 14/301)
CyprusThe IMF staff report for the 2014 Article IV consultation states that, as of October 6, 2014, Cyprus maintained three exchange restrictions under Article VIII Section 2(a) arising from: (1) limits on payments for certain transactions involving normal business activity, including the import of goods and services; (2) limitations on certain invisible payments by individuals, including firm limits on remittances for living expenses for certain family members; and (3) limits on access to certain funds deposited with financial institutions in Cyprus that prevent nonresidents from accessing, converting, and transferring out of Cyprus recently acquired net income from current international transactions or investment income. (Country Report No. 14/313)
EthiopiaThe IMF staff report for the 2014 Article IV consultation with Ethiopia states that, as of September 8, 2014, Ethiopia maintained four restrictions on the payments and transfers for current international transactions, which relate to: (1) the tax certification requirement for repatriation of dividend and other investment income; (2) restrictions on repayment of legal external loans and supplies and foreign partner credits; (3) rules for issuance of import permits by commercial banks; and (4) the requirement to provide a clearance certificate from National Bank of Ethiopia to obtain import permits. These restrictions are inconsistent with Article VIII, Section 2(a), of the IMF’s Articles of Agreement. (Country Report No. 14/303)
FijiThe IMF staff report for the 2014 Article IV consultation with Fiji states that, as of October 16, 2014, Fiji maintained exchange restrictions subject to Article VIII arising from the Fiji Revenue and Customs Authority tax certification requirements on the transfer abroad of profits and dividends, on the proceeds of airline ticket sales, on the making of external debt and maintenance payments, and from limits on large payments (e.g., oil imports and dividends repatriation of foreign banks). (Country Report No. 14/321)
GabonThe IMF staff report for the 2012 Article IV consultation with Gabon notes that, as of January 31, 2013, Gabon levies a tax on all wire transfers, including for the making of payments and transfers for current international transactions, which gives rise to an exchange restriction subject to IMF approval under Article VIII, Section 2(a), of the IMF’s Articles of Agreement. (Country Report No. 13/55)
GhanaThe IMF staff report for the 2014 Article IV consultation with Ghana states that, as of April 23, 2014, Ghana maintained two exchange restrictions and a MCP subject to IMF approval. The exchange restrictions arise from (1) the limitation/prohibition on purchasing and transferring foreign exchange for import transactions by importers who have not submitted to the commercial bank customs entry forms for any past foreign exchange transactions related to imports, and that are unrelated to the underlying transaction; and (2) the prohibition for commercial banks to grant foreign currency-denominated loans to non-foreign exchange earners (including importers), which constitutes the withdrawal of previously existing normal, short-term banking and credit facilities. A MCP also arises, because the Bank of Ghana requires the use of its internal rate (i.e., the previous day’s weighted average interbank exchange rate) for government transactions and the surrender of cocoa and gold foreign exchange proceeds without having a mechanism in place to ensure that, at the time of the transaction, this exchange rate does not differ from the rate prevailing in the market rate (i.e., the interbank exchange rate) and the rates used by banks in their transactions with their customers by more than 2%. (Country Report No. 14/129)
GuineaThe IMF staff report for the Request for Disbursement Under the Rapid Credit Facility and for Modification of Performance Criteria Under the Extended Credit Facility Arrangement with Guinea states that, as of September 19, 2014, Guinea maintained a MCP, as the value of the official rate lags the weighted average commercial bank rate on which it is based by one day. (Country Report No. 14/298)
IcelandThe IMF staff report for the 2013 Article IV consultation and Third Post-Program Monitoring Discussion with Iceland states that as of July 18, 2013 Iceland maintained exchange restrictions arising from limitations imposed on the conversion and transfer of (1) interest on bonds (whose transfer the foreign exchange rules apportion depending on the period of the holding), (2) the principal payments from holdings of amortizing bonds, and (3) payments on the indexation of principal from holdings of amortizing bonds. (Country Report No. 13/256)
IndiaThe IMF staff report for the 2014 Article IV consultation with India states that, as of January 10, 2014, India maintained the following restrictions on the making of payments and transfers for current international transactions, which are subject to IMF approval under Article VIII, Section 2(a): (1) restrictions related to the nontransferability of balances under the India-Russia debt agreement; (2) restrictions arising from unsettled balances under inoperative bilateral payments arrangements with two eastern European countries; and (3) a restriction on the transfer of amortization payments on loans by nonresident relatives. (Country Report No. 14/57)
IranThe IMF staff report for the 2014 Article IV consultation with the Islamic Republic of Iran states that, as of March 14, 2014, Iran maintained exchange restrictions and MCPs subject to IMF jurisdiction under Article VIII, Sections 2(a) and 3: Exchange restrictions arise from (1) limitations on the availability of foreign exchange for travel and studies abroad as well as for the payment for imports based on priority lists. Amounts in excess of these limitations may only be purchased in the foreign exchange bureau market but at a more depreciated exchange rate, and (2) limitations on the transferability of rial profits from certain investments under the Foreign Investment Promotion and Protection Act and from limitations on other investment-related current international payments under this act. A MCP, which also gives rise to an exchange restriction, arises from the establishment of an official exchange rate for use in all exchange transactions, which in practice differs by more than 2% from the rate used by foreign exchange bureaus. A MCP arises from the budget subsidies for foreign exchange purchases in connection with payments of certain LCs opened prior to March 21, 2002, under the previous multiple exchange rate system. (Country Report No. 14/93)
IraqThe IMF staff report for the 2013 Article IV consultation with Iraq states that, as of April 30, 2013, Iraq maintained eight exchange restrictions and one MCP subject to IMF jurisdiction and approval. The exchange restrictions are (1) the limitation that corporates can purchase foreign exchange in the auction for import transactions only; (2) limitation on the availability of foreign exchange cash for individuals (i.e., one request a month, this measure gives rise to an exchange restriction because the limitation of one request a month constitutes a governmental limitation on the availability of foreign exchange for payments and transfers by individuals for current international transactions, e.g., basic allocations for tourist or business travel abroad, family living expenses, etc. Furthermore, because of the limitation on the availability of foreign exchange in the noncash auction to corporates and only for trade transactions, individuals who need to make payments and transfers for current international transactions beyond the maximum limit have no alternative means or channels to get access to foreign exchange, except for resorting to informal sources); (3) maximum limits on the availability of foreign exchange cash in the auction for banks (This measure gives rise to an exchange restriction because the maximum cap constitutes a governmental limitation on the availability of foreign exchange for certain payments and transfers, e.g., repatriation of certain investment income by nonresidents, including remittances of profits, dividends or interest. Because of the limitation on the availability of foreign exchange in the noncash auction by corporates to only trade transactions, they would have no other means or channels to get access to such foreign exchange beyond the maximum limits, except for resorting to informal sources.); (4) maximum limits on the availability of foreign exchange cash in the auction for money transfer companies and money exchange bureaus; (5) the requirement to pay all obligations and debts to the government before proceeds of investments of investors and salaries and other compensation of non-Iraqi employees may be transferred out of Iraq; (6) the requirement to submit a tax certificate and a letter of no objection stating that the companies do not owe any taxes to the government before non-Iraqi companies may transfer proceeds of current international transactions out of the country; (7) the requirement that before non-Iraqis may transfer proceeds in excess of ID15 million out of Iraq, the banks are required to give due consideration to legal obligations of these persons with respect to official entities, which must be settled before allowing any transfer; and (8) an Iraqi balance owed to Jordan under an inoperative bilateral payments agreement. The MCP arises from the absence of a mechanism to ensure that the official exchange rate and the market exchange rate do not deviate by more than 2%. (Country Report No. 13/217)
Kyrgyz RepublicThe IMF staff report for the Sixth Review under the Three-Year Arrangement under the Extended Credit Facility with the Kyrgyz Republic states that, as of June 12, 2014, the Kyrgyz Republic maintained a MCP, which predates the arrangement, arising from the use of the official exchange rate for government transactions. The official rate may differ by more than 2% from market rates because it is based on the average transaction-weighted rate of the preceding day. In practice, the official and market rates have never differed by more than 2%. (Country Report. No. 14/200)
MalawiThe IMF staff report for the Third and Fourth Reviews under the Extended Credit Facility Arrangement with Malawi states that, as of December 27, 2013, Malawi maintained a MCP identified in 2006 as inconsistent with Article VIII, Section 3, due to a spread of more than 2% between the exchange rates of commercial banks and the rates of foreign exchange bureaus. At that time, the IMF determined that the spread resulted from official action by the Reserve Bank of Malawi through informal limitation on the availability of foreign exchange and moral suasion on commercial banks. (Country Report No. 14/37)
MaldivesThe IMF staff report for the 2012 Article IV consultation with Maldives states that, as of January 22, 2013, Maldives maintained an exchange restriction and a MCP subject to IMF approval under Article VIII, Section 2(a), of the IMF’s Articles of Agreement, arising from the Maldives Monetary Authority’s policy of rationing its supply of foreign exchange to commercial banks. This rationing by a governmental agency has caused the channeling of foreign exchange transactions for current international transactions to the parallel market where transactions take place at an exchange rate that deviates by more than 2% from the official exchange rate. The more than 2% exchange rate spread gives rise to a MCP subject to IMF approval under Article VIII, Section 3, and also to an exchange restriction given the additional cost involved for obtaining foreign exchange.
MongoliaThe IMF staff report for the 2013 Article IV consultation with Mongolia states that, as of November 4, 2013, Mongolia maintained two MCPs subject to IMF jurisdiction. First, the modalities of the multi-price auction system give rise to a MCP since there is no mechanism in place that ensures that exchange rates of accepted bids at the multi-price auction do not deviate by more than 2%. In addition, Mongolia has an official exchange rate (reference rate) that is mandatorily used for government transactions (as opposed to the commercial market rate). Therefore, by way of official action, the authorities have created market segmentation. While Order #699 of the Bank of Mongolia issued December 3, 2010, sets forth that the reference rate is determined based on the weighted average of market rates used from 4:00 p.m. of the previous day to 4:00 p.m. of the current day, the IMF staff is of the view that this order does not eliminate the market segmentation and multiplicity of effective rates arising from it. Accordingly, in the absence of a mechanism to ensure that the commercial rates and the reference rate do not deviate by more than 2%, the way the reference rate is used in government transaction gives rise to a MCP. (Country Report No. 14/64)
MontenegroThe IMF staff report for the 2014 Article IV consultation with the Republic of Montenegro states that, as of January 8, 2015 Montenegro maintained an exchange system free of restrictions on the making of payments and transfers for current international transactions, except with respect to pre-1992 blocked foreign currency savings accounts. (Country Report No. 15/26)
MyanmarThe IMF staff report for the 2014 Article IV consultation with Myanmar states that, as of September 9, 2014, Myanmar still maintained exchange restrictions and MCPs subject to IMF approval under Article VIII. Exchange restrictions subject to IMF jurisdiction arise from (1) requirement of tax certification for authorizing transfers of net investment income abroad, and (2) limitations on the remittance abroad of net salaries. The MCP arises from the two-way, multi-priced foreign currency auction. The MCP arising from the foreign exchange certificate (FEC) rate has been removed, as FECs were redeemed from April 1, 2013, to March 31, 2014, and have subsequently been abolished. (Country Report No. 14/307)
NepalThe IMF staff report for the 2014 Article IV consultation with Nepal states that, as of June 17, 2014, Nepal maintained an exchange restriction under Article VIII, arising from the Industrial Enterprises Act that places a 75 percent limit on the conversion and transfer to foreign currency of salaries of nonresidents from countries where convertible currency is in circulation. Since the limit applies to amounts that may be less than net salaries, it gives rise to an exchange restriction under Article VIII. (Country Report No. 14/214)
NigeriaThe IMF staff report for the 2013 Article IV consultation with Nigeria states that, as of February 2, 2013, MCPs are a technical characteristic of the Central Bank of Nigeria’s Dutch auction system and give rise to a MCP under Article VIII of the IMF’s Articles of Agreement. (Country Report No. 14/103)
São Tomé and PríncipeThe IMF staff report for the 2013 Article IV consultation and Second Review under the Extended Credit Facility with São Tomé and Príncipe states that, as of December 2, 2013, São Tomé and Príncipe maintained one measure subject to IMF approval under Article VIII: an exchange restriction arising from Article 3(i) and Article 10.1(b) of the Investment Code (Law No. 7/2008) regarding limitations on the transferability of net income from investment. The restriction results from the requirement that taxes and other obligations to the government have to be paid/fulfilled as a condition for transfer, to the extent the requirement includes the payment of taxes and the fulfillment of obligations unrelated to the net income to be transferred. (Country Report No. 14/02)
SerbiaThe IMF staff report on the 2013 Article IV consultation with Serbia states that, as of June 14, 2013, Serbia maintained a system free of restrictions on payments and transfers for current international transactions, except with respect to blocked pre-1991 foreign currency savings deposits. (Country Report No. 13/206)
Sierra LeoneThe IMF staff report for the First Review Under the Extended Credit Facility Arrangement with Sierra Leone states that, as of June 4, 2014, Sierra Leone maintained one MCP subject to IMF jurisdiction arising from the applied multiple-price Dutch auction system, as there is no formal mechanism in place to prevent spreads of effective rates between winning bids from exceeding 2%. (Country Report No. 14/171)
South SudanThe IMF staff report on the 2014 Article IV consultation for South Sudan states that as of December 2, 2014, South Sudan maintained a number of exchange restrictions and MCPs under the transitional arrangements of Article XIV. The exchange restrictions under Article XIV arise from (1) limiting the availability of foreign exchange through the rationing and further earmarking of foreign exchange by the CB, (2) imposing absolute ceilings on the availability of foreign exchange for certain invisible transactions (travel, remittances for living expenses of students and families residing abroad, transfers of salaries by foreign workers), (3) the extra burden caused by channeling foreign exchange transactions to the parallel market, and (4) requiring a tax clearance certificate for access to foreign exchange for priority imports. The MCPs maintained under Article XIV arise from (1) the spread of more than 2% between the official exchange rate (buying and selling exchange rates of the CB) and the exchange rate at which commercial banks sell foreign currency within the limits set by the CB, and (2) the spread of more than 2% between the parallel market exchange rate on the one hand and that of the official exchange rate and the exchange rate in the formal commercial market on the other hand. In addition to the measures maintained under Article XIV, South Sudan maintains one MCP subject to the IMF’s jurisdiction under Article VIII. The MCP arises from the exchange rate guarantee arrangements maintained by the Bank of South Sudan (BSS) with one commercial bank. This arrangement was introduced after South Sudan joined the IMF and therefore, is not covered under transitional arrangements of Article XIV. The arrangement supports the system of foreign exchange allocations to priority imports. (Country Report No. 14/345)
SudanThe IMF staff report for the 2014 Article IV consultation with Sudan states that, as of November 21, 2014, Sudan maintains the following measures subject to IMF jurisdiction under Article VIII, Sections 2 and 3: (1) an exchange restriction arising from the government’s limitations on the availability of foreign exchange and the allocation of foreign exchange to certain priority items; (2) a MCP and exchange restriction arising from the establishment of an official exchange rate (the Central Bank of Sudan (CBOS) rate) for use in all government exchange transactions, which in practice differs by more than 2% from the rate used by commercial banks; (3) a MCP and exchange restriction arising from large spreads between the CBOS rate and the parallel market exchange rate due to the CBOS limitation on the availability of foreign exchange, which channels current international transactions to the parallel market; and (4) an exchange restriction and a MCP arising from the imposition by the government of a cash margin requirement for most imports. (Country Report No. 14/364)
SurinameThe IMF staff report for the 2014 Article IV consultation with Suriname states that, as of August 13, 2014, Suriname maintained two MCPs arising from the spread of more than 2% between the buying and the selling rates in the official market for government transactions and also from the possible spread of more than 2% between these official rates for government transactions and those in the commercial markets that can take place within the established band. (Country Report No. 14/316)
SwazilandThe IMF staff report for the 2014 Article IV Consultation states that, as of June 25, 2014, Swaziland maintained an exchange restriction subject to IMF approval under Article VIII arising from a 50% limit on the provision for advance payments for the import of capital goods in excess of 10 million emalangeni. (Country Report No. 14/223)
SyriaThe IMF staff report for the 2009 Article IV consultation with Syria states that, as of February 12, 2010, Syria continued to maintain, under Article XIV, restrictions on payments and transfers for current international transactions, including administrative allocation of foreign exchange. Syria also maintained exchange measures that are subject to IMF approval under Article VIII: (1) prohibition against purchases by private parties of foreign exchange from the banking system for some current international transactions; (2) a MCP resulting from divergences of more than 2% between the official exchange rate and officially recognized market exchange rates; (3) a non-interest-bearing advance import deposit requirement of 75%–100% for public sector imports; and (4) an exchange restriction arising from the net debt under inoperative bilateral payments arrangements with the Islamic Republic of Iran and Sri Lanka. (Country Report No. 10/86)
TunisiaThe IMF staff report for the 2012 Article IV consultation with Tunisia states that, as of July 10, 2012, Tunisia maintained a MCP resulting from honoring exchange rate guarantees extended prior to August 1988 to development banks, which will automatically expire after maturity of existing commitments (total loans covered by these guarantees amount to about US$20 million). (Country Report No. 12/255)
TuvaluThe IMF staff report for the 2014 Article IV consultations with Tuvalu states that, as of August 5, 2014, IMF staff continues to conduct a comprehensive review of the exchange system to assess jurisdictional implications. (Country Report. No. 14/253)
UkraineThe IMF staff report for the First Review Under the Stand-By Arrangement states that, as of August 18, 2014, Ukraine maintained two MCPs arising from (1) the use of the official exchange rate for certain government transactions without establishing a mechanism to ensure that the official exchange rate does not deviate from the market exchange rate by more than 2% and (2) the requirement to transfer the positive difference between the sale and purchase price of foreign exchange to the state budget if the purchased foreign exchange is not used within 10 days and is resold. In addition to these existing MCPs, the IMF staff identified two exchange restrictions inconsistent with Article VIII, Section 2(a) arising from (1) the imposition of absolute limits on the availability of foreign exchange for certain current international transactions and (2) the imposition of a foreign exchange transaction tax that applies to both cash and noncash purchases of foreign exchange. (Country Report No. 14/263)
UzbekistanThe IMF staff report for the 2012 Article IV consultation with Uzbekistan states that, as of February 1, 2013, Uzbekistan maintained at least two exchange restrictions and one multiple currency practice (MCP) subject to IMF jurisdiction. First, undue delays (of up to and exceeding 12 months) in the availability of foreign exchange for payments and transfers for current international transactions give rise to an exchange restriction. Second, the Central Bank of Uzbekistan’s practice of providing only limited foreign exchange for payments and transfers for current international transactions is considered direct rationing and gives rise to an exchange restriction. Third, the practice that no interest is paid on “blocked accounts” for conversion of sum to foreign exchange and that these transactions are delayed beyond the normal 5–7 business days, give rise to a MCP, since the lack of interest payments directly increases the cost of the exchange transaction. (Country Report No. 13/278)
ZambiaThe IMF staff report for the 2013 Article IV consultations with Zambia states that, as of November 26, 2013, Zambia maintained three exchange restrictions subject to IMF approval under Article VIII, Section 2(a). The first exchange restriction arises from the requirement that a person making payments of dividends in foreign exchange to a foreign bank account or nonresident person provide a tax clearance certificate and evidence of payment of corporate or income tax. The measure gives rise to an exchange restriction subject to IMF approval under Article VIII, Section 2(a), because it imposes limitations on the availability of foreign exchange for the making of payments of current international transactions based on noncompliance with obligations that are unrelated to the proposed transaction. The second exchange restriction arises from the requirement that a person making payments for royalties, management fees, technical fees, commissions, or consultancy fees in foreign exchange to a foreign bank account or nonresident person be accompanied by evidence of corporate tax payments. This measure similarly gives rise to an exchange restriction subject to IMF approval under Article VIII, Section 2(a) because it imposes limitations on the availability of foreign exchange for the making of payments of current international transactions based on noncompliance with obligations that are unrelated to the proposed transaction. Further, Zambia continues to maintain an exchange restriction, which is subject to IMF approval under Article VIII, arising from limitations imposed by the government on access to foreign exchange for the making of payments and transfers for current international transactions, which is evidenced by the existence of external payments arrears accumulated prior to October 4, 1985. (Country Report No. 14/5)
ZimbabweThe IMF staff report for the 2014 Article IV consultation with Zimbabwe states that, as of June 3, 2014, apart from one remaining exchange restriction subject to IMF jurisdiction arising from unsettled balances under an inoperative bilateral payments agreement with Malaysia, payments and transfers for current international transactions can now be effected without restriction. (Country Report No. 14/202)
Source: IMF staff reports.

Includes 188 members and 3 territories: Aruba and Curaçao and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

The measures described in this table are quoted from IMF staff reports issued as of December 31, 2014, and may have changed subsequently to the date when they were reported. The table does not include countries maintaining exchange restrictions or multiple currency practices whose IMF staff reports are unpublished unless the authorities have consented to publication.

Source: IMF staff reports.

Includes 188 members and 3 territories: Aruba and Curaçao and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

The measures described in this table are quoted from IMF staff reports issued as of December 31, 2014, and may have changed subsequently to the date when they were reported. The table does not include countries maintaining exchange restrictions or multiple currency practices whose IMF staff reports are unpublished unless the authorities have consented to publication.

Exchange measures maintained for security reasons

Some member countries maintain measures imposed solely for national and/or international security reasons, which could give rise to exchange restrictions under IMF jurisdiction. These restrictions, like others, require prior IMF approval under Article VIII, Section 2(a). However, because the IMF does not provide a suitable forum for discussion of the political and military considerations leading to measures of this kind, it established a special procedure for such measures to be notified and approved.16 In total, 33 members notified the IMF of measures introduced solely for security reasons during 2014, while 9 members did so during January–April 2015. The number of countries notifying the IMF of such measures rose significantly from 14 during 2013 and 12 during 2014. For the most part, notification was from advanced economies. In general, the restrictions involved take the form of financial sanctions to combat the financing of terrorism or financial sanctions against certain governments, entities, and individuals in accordance with UN Security Council resolutions or EU regulations.

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